ML19322C246
| ML19322C246 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 09/24/1979 |
| From: | Arnold R GENERAL PUBLIC UTILITIES CORP. |
| To: | |
| References | |
| NUDOCS 8001160686 | |
| Download: ML19322C246 (143) | |
Text
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I NUCLE AR REG UL ATC RY COMMISSION
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IN THE MATTER OF:
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'"HREE MILE ISLAND l
SPECIAL INTERVIEWS l
i DEPOSITICN OF ROBERT C. ARNOLD l
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Place -
Middletown, Pennsylvania Date -
Monday, September 24, 1979 Peges 1 - 143 p
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A I guess I would not have expected it to be off-sice I
2II monitoring as much as assistance in management, administration of the data collection, integration of the data, analysis, 4
inte rpretation of it, and providing additional analytical 5
capabila.f.e; here on-site to augment the analytical 6' capabilities we had.
7 O
Not so much taking the readings or supplying the 8
instruments to be put out there, but analycing the data came 9
in from them?
10 A
Yes, although here agai at was more of a 11 supportive role, because clearly the emergency plan envisioned 1
12 that the emergency response organization would make the i
13 i
calculacions on off-site doses and the implications of the i
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releases.
15 I
We did have RMC greatly expand our off-site monitoring l
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program quite quickly but that was in response, I think, to 1
17 i
the conditions that existed and not as a result of the e
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18 prior contractual basis for the support.
19 Q
Let me turn to another subject now.
The declaration 20 of commercial operation of a power plant, nuclear power plant.
Who was the person who had the major responsibility for making l
21 t
22 the decision that Unit 1 was ready to be declared in commercial j I
l operation?
Was that you at the time?
23 l
I 24 A
Yes.
I think that it would be fair to say that I 4.- %.i m.oort.c,inc.
25 was, in effect, a last check-off for declaring it commercial.
1
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was understood the basis under which I would do that.
I i
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didn't make that decision in a vacuum, as it were, from a management sense, but the letter declaring it commercial was i
4 signed by myself and it was the result of my making the t
c judgment that we had fulfilled the criteria we established for 6
ourselves for declaring co=mercial operation.
7 0
When you say the criteria we had established for 8
ourselves, were those criteria ever written down for Unit l?
9 A
Certainly not to the extent uhat they were documented 10 in advance for Unit 2.
I think the understanding that existed 11 is that we would complete our start-up test program and 12 demonstrate the ability of the unit to operate at its rated l
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output before we declared it commercial.
14 Q
When you say the start-up test program, are you 15 referring to the test program required by the NRC or a test program in addition that was worked out by the company in
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16 i
l 17 addition to or parallel with whatever the NRC requires?
i A
Our start-up test program was more extensive than 19 what one might term the minimum requirements of the NRC.
We 20 contained within our formal start-up test program those
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2I requirements that did exist from the NRC.
22 So it was really a company program broader based than the l
23 regulatory requirements but encompassing within it those 24
.equirements.
s.e. o.e m i n.oo,w s,inc.
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25 i
Q Who worked out or developed the criteria for
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I Uni: 1 that you just referred to?
Did you have a hand in u
20:! that?
Were those received in some way when you came into the i
3l job?
I 4
A I think that my perception of the requirements were Sl based upon the practice within Metropolitan Edison that had I
6'I existed pricr to TMI Unit 1 completing its test program.
My 7
specific experience had been with the installation and staruup 8
of combustion turbine facilities in the previous nine years.
9 I think I had put into service some seven or eight units 10 and kind of developed an understanding of the practice within 11 the company for testing and operation of the units before we 12 would feel they were ready to de turned over to the system 13 dispatchers for them to control.
14 In going commercial in my mind, at that time it meant 15 principally the turning over of the unit for its dispatching to the system operators.
i 17 O
When you said system operators, do you mean the
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18 operating company or are you talking about the power crid now?
19 A
I'm talking about the power grid.
I associated in 20 my mind at that time the principal import of commercial 21 operation, aside from wh,at I recognized was a changing in 22 the accounting treatment of it.
The commitment to the 23 interconnection operators -- what I call the system operators --
24 of that unit being available for routine operation under 4
.p.o.r.i a.oon.n. inc.
I their control.
i i
sbnLRN #5 77
' I O
And that commitment, I take it, is not a commitment 2
that occurs at the earlier time when a plant is syncronized i
I 3I with the grid?
s A
That is very specifically not made available to 5
them at that time.
6, Q
Was it your understanding that the criteria had been 7
developed and written down before Unit 2 went commercial were 8
similar to those that had been applied before?
9 A
I think they included what had been applied before.
10 0
Were there any written criteria that came about 11 )
l when the formal development was written out?
12 A
I think there developed a formalization of criteria i
13 ' which previously may have been implicit in a declaration of EndLRN#1P commercial operation but it was not -- within my experience, 15 at least -- that it was systematically reviewed.
16 17 l
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Q Let me show you what we have marked as Exhibit 13
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2 ll in these depositions.
This contains five or six pages in the 3
front of it that appear to be a set of criteria written out
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4l and signed by you and others in June of 1978.
l 5
Do you recall at whose instigation this project was under-t 6j taken, to actually formalice these criteria within GPU and 7l develop a written guideline like this for taking the plant 8i commercial?
I 9
A Yes, I am quite clear on my opinion as to the 10 '
background of it.
I I
II Q
Can you tell us about that?
12 l A
It goes back to the declaration of unit 1 for i
13 '
commercial cperation.
I guess an awareness at that time by i
i 14 Herman Dieckamp, who had been with the company perhaps a 15 couple of years at that point -- I don't recollect --
O This is late 1974?
17 A
Yes.
It was actually September 2.
Closer to mid-18 1974 that unit 1 went commercial.
I think as he reflected upon the way in which we declared a major investment such as 19 20 TMI unit 1 for commercial service, that he believed a more l
21 formal systematic review of the status of the plant was 22 appropriate.
So we convened at the; time, even though it was i
23 after the fact, a TMI unit 1 commercial review made up of 24 equivalent dast of characters that were used for TMI 2, and AM.FGQ9ftl NGOO,19ft, InC.
25 had sometime in September or October a review of many of the 4
jc 2 79 I
li same items with regard to unit 1 that we had incorporated 2
in the criteria set forth in the reference document.
3 When it got into the time frame of Homer City unit 3 4
becoming commercial, it certainly appeared appropriate to hold f
51 a similar type review and I think that at that time we utilized' 6,
perhaps an earlier draft of this, or at least some thoughts
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i 7
that we developed within my generation division as to how 8
to formalize chat process.
And I had notified Jack Herbein-9 and the TMI people that we wanted to do that type of formal 10 review ahead of declaring TMI unit 2 commercial.
And to make 11 everybody within the system aware of what that process was 12 '
supposed to involve to provide us greater assurance it would 13 be done in a thorough manner, we developed this procedure 14 which is referred to by you as a governing document for 15 requiring and defining a preco=mercial review.
16 Q
Why was it desirable to do this?
In your own 17 mind.
Is this a management tool or does
't assure that all l
18 the things that have to get done will get done when you otherwise 19 won't be assured of that?
20 What is it that this is supposed to do for you?
21 A
I think it is clearly a management tool and it goes --
22 what you referred to as another possibility -- I think it 23 encompasses that.
24 I think it fundamentally grows out of a sense of what is A.F.oer.i neoon.n. inc.
l 25 the proper way to administer and manage company operations that l
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1, invcive the degree of investment and criticainess to the 2
l company's well being as a new generating facility does.
2' It also has become clear over the last ten years that 4
generating stations are more expensive; they are more complex; I
Si and the regulatcry and e-iministrative requirements are greater l
l6' than they were in the '60s, for example.
7 So what this does is provide a horizon, so to speak, against:
8 which the project can be -- executing the project prior to 9'
its completion, knowing that that is the scope of activities 10 against which the completeness of the project is going to be Il judged.
It is not anything new in the sense of what the 12 I proj ect organization and procedures address.
13 The ongoing project has a responsibility in a formalized 14 way for addressing all of these issues.
But it says to 15 everyone:
Lefore. we say that investment is ready to be put 16 into service, we will sit down and systematically look at the 17 technical anf administrative and personnel aspects that have IS been brought into place at that 'ime and satisfy ourselves that t
19 it is p=xient to proceed with commerciali=ation.
20 Q
Do you know who was the primary person who drafted i
21 these criteria?
Was that Mr. Bachofer?
22 A
My recollection is that Eachofer was the primary 23 author of it.
He undertook the drafting after some discussion 24 with me and also, I am fairly certain, after we used an earlier Am-Fecersi Reporters, Inc.
25 draft, which, as I say, is kind of a reference document during l
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the Homer City 3 review.
il 29 Q
So you had a lot of input into these criteria
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3 yourself, substantively?
4 A
Yes, I did.
5 Q
Are these substantially different in any way from i
6l the criteria that were applied in the unit 1 decision?
Are i
7; there some significant criteria here that are added or any 8
that weren't, that were subtracted, any that you applied to 9
unit 1 that you didn't apply here?
10 A
I think we included in these criteria a requirement 11 l for specifically addressing and judging adequate administrative i
12 and staffing issues which I certainly would have had to have 13 been satisfied with regard to unit 1 were acceptable, but 14 didn't specifically review with the explicitness that we did 15 in this instance.
16 I think I would have to ascertain that all of these criteria, 17 were either in existence explicitly or implicitly or I would
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18 not have been agreeable to declaring unit 1 commercial.
19 Pat the items other than completion of the test program l
20 were judged to be acceptable based upon other management 21 systems that we had in place than one similar to this.
22 Q
Let me ask you about 2.6.2 -- I am sorry.
It is --
23 yes, 2.6.2 in there.
Can you tell me what that means?
That 24 paragraph?
Am Fooeral Reporwes, tec.
25 A
Yes.
I je 5 82 0
Specifically, what test results are being referred 1 l 2
to and what the term "PCCPL" refers to?
f 3'
A PCOPL is proposed ce=mercial operation power level.
4 I believe it is defined in an earlier section.
5 0
Right.
i 6 'I A
That is 2.1.1.
7 Q
Who sets that?
Is that a ecmpany-defined term?
8 A
Yes.
It was a temminology that we -- and i
9' probably more correctly, myself -- generated in the course of 10 developing this procedure.
11 '
O What does that mean?
Is that prcjected or designed 12 100 percent power level or something else?
13 A
It could be something else.
We recognized when we 14 wrote this procedun that the circumstances at the time the 15 plant -- let me start over again.
16 We may be at the point of wanting to declare the unit i
17 commercial at something below its designed or expected full l
18 power output.
19 There have been circumstances in the past, and likely one 20 is to arise in the future, where it is prudent and desi,rable
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21 to declare the unit commercial at something less than its 22 anticipated full power output.
We did that for Homer City 3, 23 for example.
24 So this Vas to recognize that that might well be an approp-Aa.J.e mi neporiers,inc.
25 riate ucvelopment.
2.6.2 said that for whatever power level r
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83 fc 6 1 l we prcpose to make it commercial.
We had to have cc=pleted 2!
appropriate test programs and meet appropriate Federal, state, 3
and local regulatory requirements.
In other words, we 4i.
weren't to, in effect, declare it commercial when, for that 5
power level, at least, it was not commercial in the fullest 6;j sense.
7 Q
Why was the Homer 3 plant declared commercial at 8
less than 100 percent power, or 100 percent projected full 9
power?
10 A
At the end of 1977, Ecaer City 3 had not yet completed 11 its start up test program.
It had operated for a significant 12 amount of time at part load and it had shown the ability to 13 operate reliably at part load.
14 Our feeling was it was only a matter of going through the 15 remainder of the test program to demonstrate its ability to 16 operate at rated cower.
17 So I had no reluctance to declare it commercial at part loadi i
18 at the end of 1977.
There was considerable interest on the 19 part of the 50 percent owner -- non-GPU owner, New York State 20 Electric and Gas -- to have it declared commercial in 1977.
l 21 GPU was indifferent to whether it was 1977 or 1978, as l
l 22 far as I knew, and we had no qualms about being consistent l
I l
23 with New York State Electric and Gas.
24 Q
SC was Homer City 3 declared in commercial operation Am-Fooerst Reportets, leic.
25 in the last couple of days of 1977?
l 1
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A Yes.
J 2h MR. FRAMPTON:
Let's break for lunch now.
We will 3
reconvene at 1:30.
XXX d
(Whereupon, at 11:30 a.m.,
the hearing was recessed,
.ond 12 5;
to reconvene at 1:30 p.m.,
this same day.)
I
.XXX 6!
AFTERNOON SESSION 7
(1:55 p.m.)
8 MR. FRAMPTON:
On the record.
9 EY MR. FRAMPTON:
10 0
I think, before we broke, we were discussing the 11 question of when it was possible or known to declare a plant 12 in commercial operation at less than the anticipated full-13 power level.
I Id We were talking about Homer City 3.
Do you recall at what 15 percentage of the full-power level that was declared 16 commercial?
Approximately?
i I7 A
I think we declared it co=mercial initially at 300 I8 megawatts.
It is a 650 megawatt nominal reading.
It may have I9 been a little less than that.
I am sure it wasn't below 200 20 megawatts.
21 0
Do you recall how long it took thereafter to complete, 22 the testing procedure to get up to approximately full power?
23 Was it a matter of days or weeks or months?
I 24 l
A It was a matter of weeks.
As we go un in oower, Ap490eral ReacMen, Inc.
25 l
particularly with coal plant, there is a lot of adjustment O
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of systems, alignment of cont:ol systems, that are necessary 2h at various power levels that can't be done excep with the P
3l plant on the line.
4 We didn't have the capability to do it, at least, except 5
with the plant on line.
My recollection is that we had its
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i 6l commercial rating as a 650 megawatt about the end of February.
I 7'
We made some incremental steps in between there as we 8
completed the testing at various levels.
9 0
In the case of TMI unit 2, was that a realistic 10 possibility?
To go into commercial operation at less than 11 full power?
12 A
Well, I think that absent some of the other concerns--
13 namely the interface with the rate cases that we had in 14 progress during 1978, it may well have been a possibility, but 15 we weren't really considering doing that because of the --
4 16 because of some of the concerns that had been expressed by i
17 the PUC; and we told them we would not place it in commercial !
18 operation until we fulfilled the items that were identified.
19 I think that the kind of thing that could have developed 20 was say a regulatory limit for some reason that would perhaps 21 limit us to 75 percent reactor power, as an example, if that l
l 22 had developed, I think we would have gone back to the PUC 23 and said:
Look, because of circumstances we think it only 24 makes sense to go ahead and declare the unit ecmmercial and Am Fwrot Ruemts. Inc.
j 25 we will operate at 75 percent power until we clear this power 1
l
jc 9 86 level limitation.
1; i
2 i
0 So you, in essence, made a commitment to the l3' Pennsylvania PUC to complete your full NRC test program or your test program up to full power before you declared commercial; 4
5 is that right?
i 6!
A Yes.
I Q
What were the concerns that they expressed that 7l 1
al caused you to say that you would do this?
9 A
Well, there had been, as part of our rate application, 10 l a request to include TMI unit 2 in rate base for the rate crder.
11 We agreed with them that TMI 2 should be in operation -- maybe 12 that is putting it too strongly -- we at least recognized 13 the advantage of not getting into a dispute over whether or 14 not TMI 2 had to be in commercial operation within the 15 test year period for the rate in order for the PUC to put TMI B
16 2 into their rate base.
i 17 Did that come across right?
i 18 Q
Yes.
Can you tell me about what the test year t
19 period was in the case of this proceeding?
20 A
Calendar year 1978.
So that in the course of those 1
21 rate proceedings -- in at least the second quarter of 1978 --
22 the hearing examiner, administrative law judge more properly, i
23 requested the parties to identify what they felt were the 24 appropriate bases for placing a unit in commercial service.
Am Fewet Rworwn. ine.
25 I think there was also the same question either expressed
je 10 87 1
or implied as an item of interest to the PUC, itself, as well 1
2 ll as the administrative law judge.
So the basis for making the
- l 3f judgment that a facility should be into commercial service 4
was a topic that received a lot of discussion between the various parties to that rate proceeding, and we identified 5
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6!
to the PUC and the administrative law judge what we would i
7 suggest were the criteria which fulfillment of provided an i
B' adecuate basis for declaring the unit commercial.
I presume'you have the letters we wrote to the PUC in which 9
1 10 we stated those.
I' 11 Q
As you understood it, what was the -- the test year 12 doesn't have to be a calendar year; does it?
I 13 A
It does not.
14 Q
What determined the test year in this case?
This 15 was the test year for your rate proceeding; is that correct?
l 16 A
Yes.
More exactly, it may have been for only one i
17 of the two companies.
There may have been a three-month 18 difference in the timing of the two test years.
j 19 The Pennsylvania laws were modified, or new legislation 20 was passed in 1977, as I recall, which provided for utilizing 21 a forward-looking time period as the basis for the test year 22 before setting the utility rates.
1 i
23 My understanding was that the PUC issued administrative j
24 procedures that effectively limited the company to utilizing Am Fooeret Rooorters, Inc.
25 six months actual data and six months for cast data for their 4
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test year, and the PUC regulations also provide for how current
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the information has to be at the time the application is made.
2 [I 3.'
My recollection is that it must not be more than three l
months old, so to speak.
So that what we really had was a 4
situation where a filing can be made.
By the time the proceed -
"i ings are comp'lete, all of the time period for that test year 6
1 is essentially going to be historical.
7 Let me go on to say, though, that rate case rules and pro-g cedures are not my area of responsibility and I am giving you 9
what my understanding is, hoping that will be helpful rather thE: l 10 11 just telling you I am not qualified to talk about it.
12 Q
Let me see if I understand at least what your understanding is.
Maybe we can share ignorance on this.
The 13 date at which a unit goes into ecmmercial operation is the date ja at which it becomes possible or eligible to be included in 15 0
16 the rate base; is that a fair generalization, at least?
i i
A I think that is accurate, but I would put the i
17 i
emphasis on the other aspect of it.
It is that time at which 18 19 we are no longer able to treat that investment as construction work in progress.
20 Consequently, we must handle it,, from an accounting stand-21 22 point, as plant in service.
The issue is whether or not that additional investment and the expenses associated with it are 23 24 adequately Sovered by rates.
AmJacerol Reporters. Inc.
25 0
You said you filed a request for a rate increase that
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included the cos of TMI 2 in the rate base.
Was that done l l'l l
2 in late 1977 or early 1978?
3 A
I think both the Met Ed and Penelee rate filings i
4' were early 1978.
5 0
Early 1978?
6 A
That is my recollection.
7 0
Could you have asked -- could that have been 8
accomplished prior to the time the unit went into commercial 9
operation?
Was there any possibility tnat you could have 10 gotten a rate increase effective in May of 1978 when TMI 2 11 was not yet scheduled to go into commercial operation until 12 September of 1978, let's say?
13 A
I think we clearly could have gotten a rate order-i 14 at that time, but I don't know whether it could have included 15 an assumption of TMI in rate base.
i 16 One of the options that we recommended be considered by Il the Commission was proceeding with issuing us rates which t
18 assumed TMI 2 were in operation, and we would voluntarily I9 suspend imposition of those rates until it did, in fact, go l
20 into service.
21 There was at least dialogue about this kind of approach.
22 The regulatory process is so time-consuming and resource-23 consuming, we were looking for ways in which to have TMI. 2 24 adequately recognized without being caught by the vagaries
.....,,,. ~ _...
25 of the scheduling development in putting it into service.
end 13 1
I 1
CR - 7193 I
r:1-1 90
= 14 1
0 So the incentive or the desire to get the unit 2 l into commercial operation by the end of calendar 1973 frc=
3 a rate base point of view alone was the desire to have it 4
in operation during the test year that applied to that rate f
4 5
filing that had been made, or made by the various ccmpanies 6l l
previous to that?
I 7
A Yes, because as I understand it, that would remove, 8
as a matter of contention, whether or not subsequent rates, 9
which we had not received at the end of 1978, could properly 10 reflect TMI 2, even though TMI 2 would subsequently be in Il service and be in service even prior to the issuance of those 12 rates.
13 I think it was our position that it could still be included 14 in the calculation of the appropriate rates but the incentive 15 from the company standpoint -- the only incentive that I know 16 of -- to have it commercial by the end of the year was that it 17 removed that as an issue before the PUC.
18 I might point out some argued, I recall, that even were 19 it in service within the test year, it should not be included 20 in rate --
21 Q
But you fe'.t it would be better off if it got.into 22 service by the end of the test year?
23 A
Yes, that was my perception.
24 l 0
I have asked you about the relationship between 1
A.s e - w n eo m n. w.
25 getting to full power testing and completing the NRC's test I
rtl 2 91 I
program on the one hand, and going into commercial operation 2h on the ether.
3 Let me syk you a slightly different question.
That is 4
about the relationship between your own test program and going 5
into commercial operation.
I think you developed your own 6
test program and you had something called a master test 7
index or master test program, something like that, is that I
8 cerrect7 9
l' 9
A The master test index was the list of test procedures, 10 which governed the testing.
l Q
Did that include various tests not required by the I2 NRC test program?
i 13 A
Yes.
l Id Q
Was it --
l l
t 15 A
Let me perhaps clarify that a bit, inasmuch as I l
16 think that the NRC was privy to all of our test plans and I I7 think we probably described the secondary plant test program, i
18 but my presumption is that the NRC was not in a position to lo apply regulatory authority on portions of the test program that 20 didn't relate to nuclear safety.
21 Q
Is it part of the criteria that were developed in 22 this review board document, or, rather, the criteria that the t
23 review board used, to complete your own test program?
Was 24 there a direct link between these criteria and your master Ace Federst Reporters, Inc.
'S test index for unit 2?
6 i
soms I
l 92
- 1 3 l
1 A
I don't recall offhand what is stated in this docu-2 ment here in front us, 2.6.1.1.
The recuirement is tested t
3i per the approved tes: plan.
And that includes the total test-1 4
ing program,not just the portion subject to regulation.
f 5
would like it clarified, though, that test program administra-l 6,
tive controls provided for waiving some portions of the test t
i 7
or completing portions of the test and leaving for a later 8
8 date the completion of other portions as the systems became I
9 available, so that the expectation was that the Review Board 10 would review those portions of the test program that had not 11 yet been comeleted if there were any and make a judgment i
12 as to whether the incompleteness of those portions were 13 grounds for not declaring the unit commercial.
14 The board clearly had the authority and the responsibility j i
15 to make that judgment with regard to uncompleted test items.
l l
16 Q
Do you recall whether the Review Board did, in f act, 'l l
17 approve the waiving or omission or postponement of some tests j
1 18 that had originally bee in your master test index?
i 19 A
My recollection is that there were identified 20 something like six tests not yet completed.
I may be confusing!
21 that Review Board with Homer City 3.
I am not confident.
i 1
22 think the minutes of that meeting speak for themselves in that i
23 area.
24 But my recollection is that there were identified some i
Am Fot$eral Reporters, iric.
25 tests which we didn't believe impacted on readiness for i
l
' rtl 4 93 1
1 ;l reliable operation that were targeted for later completion.
l li..
2i There may have been one or two that was proposed for deletion 3
which we didn't object to deleting.
I think there were a 4
number of tests which were identified as to portions of those 5
tests having yet to be completed.
I think there were items not.
i 6
yet complete certainly at the time we met and part of the 1
7 obligation of the kind of subcommittee we set up for the last l
8 iteration on this was to assure that the portion of the testing '
9 program identified by the board as being these prior to i
10 I commercial operation, but not vet comolete at the time the board Il convened had been satisfactorily completed.
i l
12 Q
Eow many times did this board meet -- actually i
13 convene and meet?
Was it just this one meeting October 26?
I l
14 A
Yes.
I j
15 Q
Was that the intended purpose of it, to convene at 16 a late date -- that is, a date near to commercial operation -- l l
17 and pretty much review everything that had happened up to then 18 and make a decision at that time' 19 A
Yes.
That was the concept.
The approach 20 principally was to do the review by looking at exceptions as 21 opposed to a review of all of the things that were according 22 to plan.
i.
23 Q
In other words,.the plant staff was supposed to come; 24 in and say,"We have done everything but the following things- "
l Ace-Federet Reporters, Inc.
25 and then the Review Board would make a decision which of those I
I i
r:1 5 94 f
I had to be finished, and if some didn't, which ones could be 2l(postponed or waived for commercial operation?
'l A
Yes.
There was certainly that aspect to it, but d
there was also to satisfy ourselves that the plant staff and I
t 5
the project people were being objective about what had been 6l completed.
1 7
We did have discussion on those portions that they didn't l
8 identify as needing discussion with regard to exceptions and 9
there were many areas where we brought in people who didn't l
i 10 have line responsibility to review the status and report to the i
11 board on what their review identified.
l O
Why was the subcommittee formed?
j 12 A
The scheduling of the board was difficult to do on j
13 i
Id a very short term because of the nature of the responsibilities l
15 of various members, so we initially targeted for as close to l
l 16 commercial operation as we thought we would be able to hit, I7 and I think we were looking at the time we scheduled, the end 18 of Octor e, being completed actually the end of October.
l t
U the time the board met, I think we were looking at seme-f 20 where in the middle to latter half of November as being the time f
21 of completion of the test program.
i 22 The subcommittee was established because it was clearly 23 recognized at the time of the board meeting that there were a 24 number of in:omplete items which the board should take a i
l Aco-Feeerst Reporters, Inc.
25 position en officially before the unit was declared commercial.
l l
rtl 6 95 I
I Q
So 1: wasn't in the original master plan to have a 2
subcommittee, but the length of time made i: necessary i
3fbasicallytohaveanothermeeting?
4 A
Well, I don' t think we felt it was necessary ec have,
l 5l another meeting.
It was necessary for a core group of us, I 6!
guess, who had most direct interest, or perhaps more direc:
7 responsibility, to review among us, as it were, those open 8'
items or those items that were open as of the time of the 9
convening of the full board before the unit went commercial.
10 It is a very difficult issue to imagine in a sense, II inasmuch as we are trying to hit a moving target a mon h cr 12! two ahead of the time we want to convene the board, to try to 13 have that board close enough to the end of the, process that i
14 a sufficient amount of process is complete that we can sign 15 off on it.
i 16 In retrospect, that is probably an unrealistic expectation.
17 I would anticipate the approach we took is it will probably 18 be a mere routine method.
That is, we would still try to 19 target a meeting of the full board as close to commercial 20 operation as we can and then identify relatively restricted 21 list of item. for which some subgroup of the board would have 22 to pass on before we went commercial.
23 Q
You talked about shooting at a moving target.
Can 24 you tell me what you recall about how that target moved over Ace-Fooeret RecofWfs, Inc.
25 time?
Some of the letters that were written I think in July e
rtl 7 96 l
1 of 1978 to the PUC indicate that you were shooting at late 1
2 l October as a date for commercial operation at that time.
- Then, l
3!
as of October 26, it still looks like you are shooting at late 4
November.
5l Yet the actual date isn't until late December.
Do you i
6l recall whether, from the time you got the main steam safety 7
relief valves back in, the new ones in, whether there were i
8 other major things that delayed that date until the fat 1' i,
9 A
Well, I don't know to what extent I would call them 10 major things, but there were other items that delayed the unit, 11 and I think I would want to go back and review some records 12 rather than try to reconstruct it from memory.
The end of 13 October is my recollection of what we were identifying through ;
1 14 the summer, and I think that we didn't go to the end of i
15 November until early in October.
I don't remember just what
{
16 specific problem we had that caused us to shif t it that month. l 17 Then I know there were some additional problens, which I 18 considered in the nature of those to be expected in the start up 19 of a complex plan common to the experience of other similar 20 facilities during their start-up program.
~
- 15 21 Q
Let me show you what we have marked as Exhibit 14 22 and ask you to explain what that is.
At least, pages 1 through i
23 6.
24 A
This is, in effect, the cover document for the report A Jeoerei neoonen, inc.
25 of the Review Board. An integral part of the report was i
P l
W 97
- 1 8 1
=aterial that was disseminated at the meeting as prepared i
2 material for the presentations.
3 Q
Would this be the report of the board or minutes of the board in some sense based on the October 26 meeting 4
l 5
and perhaps on any later developments up untilthe date this j
6 was issued?
7 A
Yes.
The items that received general discussion i
e in each of the various criteria areas were summarized in this l
r 9
report.
10 The write-up was based upon notes taken at the teting s
11 by John Bachofer, it is my recollection, but it mal iave been l
i 12 by someone for him.
i 13 0
Perhaps you can explain to me, if all of the testing I l
t 14 program had not been completed as of the date when various 15 individuals signed or appeared to have signed off on this i
16 document, which is December 18 to 21 or thereabouts, why is i
k 17 it that the conclusion 2.0 on page 1 states that it is deter-l l
18 mined tha-the unit is technically ready for commercial i.
19 operation?
20 A
I think it was intended to reflect the total board's o
i 21 consensus that all the information provided to us at the time 22 of the meeting of the board on October 26 indicated that a i
i 23 degree of completeness as to preparations for plant operations
{
24 and testing program up to the 75 percent power level, that led ww.i n.oo,wn, inc.
25 us to conclude that the unit was ready to be placed into 1
I I
e
rtl 9 gg 1
commercial service.
2l I think that statement has to be placed in the context cf i
3' the total minutes, which obviously identify a cavea to tha 4
conclusion, that caveat being that the balance of the testing t
5i program between 75 and 100 percent were to be followed and I
i 61 reviewed by the subgroup, and that conclusion presumed that that 7
group would not identify any adverse information towards a
placing the unit in commercial operation.
9 0
If-you look over on page 6 at paragraph 5.0, you 10 will see that this paragraph specifically indicates that there l 11 are matters outstanding to be completed, including completion 12 of the test program, completion of some tests.
I don't k'ow what your cuestion is.
13 A
n s
14 Q
Yet, paragraph 2.0 seems to be in conflict with that 15 saying that the plant is technically ready for commercial i
16 operation.
17 A
I don't think so at all.
18 Q
Does that mean technically it is ready subject to 19 the things set out below being successfully completed?
20 A
I think if you go through the various paragraphs, i
21 one could see what restraints we indicated vis-a-vis the 22 status of these.
I
(
23 I think the only item in here that was considered a 24 constraint before being ready to go commercial is 2.6 on test Ace-Federst Reporters, Inc.
25 completion.
These items don't represent the only listing of j
i
- i i
1
' l l
rtl 10 99 1
actions yet to be completed on the plan, but they represent 2 I those that were identified in the course of the review for 3,
which no responsibility had apparently yet been assigned for 4
follow-through and correcting.
5 On a plant as complex as this, I think it would be 6
completely' unrealistic to expect that ten years af ter the plant 1
7' is in service you are not going to still be able to identify a 8
list of items that require some action.
Hardware type of items 9
and administrative ptocedural kinds of items.
And that is why i 10 the board is desirous of insuring the right level of management' l
11 judgment is brought to bear on putting it into commercial 12 service, recognizing there are going to be a lot of open 13 issues.
That is why I think you see these particular ones j
i 14 called out.
l 15 The board felt that because of either the lack of dressing :
16 themselves up until that point by the organization or the i
17 shared responsibility for closing them out between various l
18 elements of the organization made it necessary to be specific i
19 with regard to these items.
20 Q
Maybe I am not understanding your answer, or 21 perhaps I am not even communicating my question right.
What j
22 I am trying to ask you is this:
the document appears to be a 23 certification that the unit is ready to go into commercial 24 operation.
That is, that all the criteria that you, yourself, i
Ac..o.a.r.: n.oon... ene.
25 set forth have been satisfied.
Yet, it is signed by various f
a
rtl 11 q
i l
100 1
people a week or two prior to the time when we know that the 2
test procedures had finally been finished.
It appears as thougn 3
thesepeople are saying on December 18 all the criterial have bee 4
met.
That is what the document seems to say to me.
That is 5
what I can't understand."
6 A
Even differently than that, I would say this l
7 document says that the board was satisfied on October 26 that 8
they had no information at that time which was the basis for 9
not proceeding to place the unit into commercial operation, 10 once its test program had been completed.
11 Further, since the test program was not yet complete and 12 it was necessary for the board to, in effect, function on the 13 information that would subsequently be developed in the course 14 of completing the test program, that that endorsement by the 15 board of that statement of readiness was contingent upon the 16 subgroup of the board reviewing the additional information 17 that developed during:the course of the completion of the test i 18 program and satisfying the four of them, and we have the 19 opportunity for comment by the state superintendent, that the 20 balance of the test program after October 25 or 26 didn't 21 really identify any information which was the basis for 22 reconsidering that judgment.
23 If the words are a little inartful in that sense, I 24 guess they have to stand on their own merit, but I think from AceJeoeral Repor1ers, Inc.
25 an operative standpoint of management people that were svolved
101
- 1 12 j
i I
with this, that was the context within which they endorsed 2 i i
those words.
~1 j
Q So --
i 4
I think the only reas-n this had some of the dates A
J.
as late as it did is because we circult tad among the parties 5
the original.
The status in the report absent addendum A 6
. ~
,I
-- excuse me, supplement A -- I believe would have been signed t
f 8
off on October 26, had it been available at the completion of the meeting.
Really reflected the status and position of the 9
10 Board as of October 26 and supplement A reflects the position 11 of the subgroup of the board which was in ef fect empowered to 12 '
act or was charged with making that judgment on the balance 13 of the plant by the total board.
I Under this procedure, what would you have done if you Q
I 13 had had some significant problem with one of the late 16 tests?
For example, suppose the full power generator trip test 37
-- virtually the last or the last test -- had posed some kind of problem?
Would you then have had to go back to the full l
18 board and review that problem with the full board before going 20 forward again?
A I can't answer that, because you have to :valize that 21 i
I 22 these prodedures are not legal requirements, as it were.
They are tools used by management of the company. As the service 23 company officer responsible for the project, I think it would 24 Aae F.o.ew meno m es, sac.
25 have been my obligation to utilize proper judgment in deciding i
rtl 13 102 i
1l whether or not circumstances called for a reconvening of the i
board.
2 p!
l 3:
Nevertheless, I think that even under the most arbitrary 4
approach on my part, there would have clearly been the 5,
oppo:tunity for my counterparts in the operating company to 6
have said, " Wait, I don't agree with where we are, " or "I 7-don't agree with the resolution of this problem," and I don't 8
think we would ever have declared the unit commercial with 9
there being the possibility of any substantive disagreement 10 among the four vice presidents of gene
- ation as to the 11 readiness of 'tMe unit to be in comme,rcial service.
12 I just would not be intere4t:d in placing myself in the 13 position of having that type of issue come up af ter the fact 14 and I would have been quite cautious about the basis for my 15 recommendation that it was ready for commercial operation, 16 and I am quite conficant it would never be commercial without 17 consulting with me.
18 I might have been overruled, in theory, at least, if I I
19 disagreed, but I doubt if that would happen either.
20 Q
Who was responsible for completion of the test 21 program onsite?
Was that Mr. Toole?
Ron Toole?
During 22 the latter half of 1978, let us say.
23 A
He was the test superintendent.
In terms of the line 24 organizatior", he reported up through, he reported to the project w.p.a.r.i n.oon.,.. s ac.
25 manager, who was John Barton, at that time.
1 rtl 14 l
103 t
I!
O Who did Mr. Barton report to?
I 2f A
To Dick Heward, who was manager of projects who i
3 !
reported to Bill Hurst, director of projects, who reported to 4
Dick Heward had previously been the project manager.
me.
I
- 16 5l Q
Did you, yourself, have very much contact with Mr.
i 6
Toole?
Personal contact with him.
I 7
A No, I didn't.
I didn't have any in the 1978 tin.e 8
frame.
I did in the latter half of 1977 when they were finish-9 ing construction and finishing the prefuel load portion of the 10 I took part in a number of meetings here at the l test program.
i 11 site to -- which were directed as resolving certain problems j.
12 and identifying the schedule to which we were working.
13 From the first of the year onward, the test portion, when Id the plant was available for testing, went pretty much accord-I I
ing to plan.
The delays in schedule were the result of 15 16 problems that came up that weren't related to the test program 17 l
per se.
18 O
Do you remember what the major problems were that you had to resolve in late 1977 with respect to scheduling?
I9 20 A
Well, they weren't scheduling directly.
There were 21 a number.of open items that had to be finished up.
There was a larger number than ; nad anticipated in mid-1977, and we 22 had brought on to the site in the summer of 1977 Catalytic 23 Corporation to support maintenance on Unit 1 and to finish up 24 Ace-Federal Reporters, Inc.
25 the construction of Unit 2, which at the time we brought them on.
i I
rtl 15 104 Il was anticipated to be a smaller scope effort than it eventually 2'l' became when they got enboard and we scr of had a fresh icok i
3 at all of the items that had yet to be completed.
4 Q
Does that mean you found UE and CE hand't done a t
5 lot of things you thought they had done?
l 6'
A Yes, I think it is accurate to say that we didn't
'6 7
have the visibility and consequently the awareness of a number 8
of open items which were the responsibility of UEC at that 9
point.
10 I don't know that I can put quite the kind of positive II construction on it that you did, that we consciously thought 12 they were completed and they weren't, but certainly there was I3 not an awareness on our part of many of the things that had yet t
Id to be completed.
t 15 Perhaps I could even clarify that, more to the issue of l
1 16 what was involved in completing.
That was probably the larger j i
17 aspect of it, the estimate, the forecast of the amount of
{
l 18 work that would be involved in completing certain items as i
19 opposed to whether or not they were yet complete.
20 Q
When a test was completed and Mr. Toole evaluated 1
21 whether he thought the test had been completed satisfactorily, f
22 in the case of a safety-related system or primary system item, 23 what kind of check or review on his judgment, if any, occurred?
24 A
There was a test working group formally established.
l l
Am.s.o.rm n oorwri, inc.
25 The test working group had to review test results and pass on l
[
I
- 1 16 105 l
1l the acceptability of the test results.
i 2l 0
Who was a part of that group?
If you can recall, 3
approximately how many people?
Those that ycu remerber.
4 A
I would expect it normally ran five or six members.
i 5
The test superintendent, probably one member of his staff, the 6,
state superintendent or probably more correctly, the unit 7 I superintendent, B&W, Burns and Rowe, and if it was something 8
like the turbine generator, then effectively a member of the 9
vendor for that major piece of equipment was incorporated into 10 the test working group for that particular activity.
11 Q
These are all onsite people?
12 A
Yes.
13 0
Was there any offsite review?
Did those judgments 14 get any review by GPU Service Corporation people offsite that
{
4 l
15 you can recall?
j 16 A
That was not part of the system we built in on a l
1 17 routin e basis.
Thetestworkinggrouphadtheauthority--andl I
18 certainly the responsibility -- to utilize staff support on i
19 evaluation of information, and B&W did a lot of that type of 20 staff work.
21 I am sure Burns and Rowe provided a lot of effort in that l
22 area.
23 Q
I am talking about formalized review now.
Regular 24 review chain ~of some kind.
l A.4m r.i n.ooren, inc.
l 25 A
I understand that.
As I indicated, that had not been l
rtl 17 l
106 I I part of the test program.
What we see under the action items 1
2 outstanding as the last entry related to some desire en our 4
3 part to have service company staff look at the test rest ts.
I 4l But it was felt -- and I think legitimately so -- that we had 5
brought to the test working group the staffing and supported i
6!
the members of the test working group and they had the technical 7
competence to evaluate the test results.
I B
It also need be recognized that the criteria to be fulfilled, 9
by the test were established ahead of the test, so that what was 10 being evaluated really was the satisfaction that the test had 11 demonstrated the criteria that were previously established were 12 in fact fulfilled.
13 Q
Did the quality assurance group get involved at i
14 any point in reviewing tests?
l i
15 A
Yes.
The test program was clearly included in 16 our quality assurance programs.
, f l
17 Q
What does that mean?
Does that mean that the test 18 results got a second look?
19 A
Not in a general sense, it does not.
.i j
~
20 Q
The test working group was that review?
I I
21 A
No.
The quality assurance program, I think, had l
22 to do with insuring that the test working group's implementa-23 tion of the test program fulfilled their own criteria and the l
24 FSAR criter a for the test program.
...... ~.
l 25 It would have, on a surveillance basis -- on a sample basis i
- 1 18 '
107 1
-- have looked at the real time executien of the work to be 2l sure procedures were being followed, that instrumentation 3
was within its calibration as required, backing up the personnel that was actually performing the test program from 4
5 that sence, but quality assurance is not designed to do an 6l independent -- lat me say it differently.
7 The people who have quality assurance stamped on their 8
foreheads, so,to speak, are not in place to do an independent 9
review of engineering effort for technical adequacy.
If 10 independent reviews of engineering work for tec-nical adequacy i
i 11 are required, then the quality assurance prcgram insures they 12 are in fact set forth as a requirement and are carried out by 13 a technical group independent of the group-that was actually
}
i j
14 performing the activities.
t 15 So they are both still engineering functions.
That is, l
i 16 the initial work and review of that work are engineering 17 functions.
Even the need for quality assurance provides me j
18 confidence that where that is required, it is done.
19 Q
So the quality assurance program would pick out a l
20 given test and would follow it through from beginning to end 21 to see that the people who were supposed to do it did it.
The.
22 people who were supposed to review it reviewed it.
That the l
23 technical working group did what it was supposed to do with 24 respect to that test.
Ace-Foceral Reporters, Inc.
25 A
I would expect they would do that in some instances.
m i
e
f rtl 19 108 I
I would expect the more common experience is to take a portion 2
cf the test and 1cck at the process of a portion of a test i
3I from beginning to end.
4 Many of these tests are activities that take place spread 5
over a fairly substantial length of time; maybe weeks in many i
4 6
cases, months in some cases.
i 7
Q How about the case of balance of plant?
Did the n
8 test working group review those tests as well?
I 9
A Yes.
My understanding -- I am sure I am correct --
10 is that our test program administration didn' t differentiate II as to the role of the test working group between portions of 12 the test program subject to regulation and portions not subject ;
i 13 to reculation.
Id The quality assurance program did, f
i 15 Q
Do you recall attending a GPU Service Company board l of directors meeting in early December 19787 16 i
l 17 A
Not specifically, but I was attending them routinely;
};
18 in that time period.
I very likely could have been there.
19 Q
I think you said before that the only real incentive
~
20 that you knew of to get the plant into commercial operation 21 by the end of the calendar year related to this desire to have i 22 it go commercial within the test year.
I 23 My question is getting at whether you were aware of any 24 tax -- federal tax' incentives to have the plant go commercial Am Federst Reconen, Inc.
25 before the end of the calendar year?
I i
e m
rtl 20 l
109 1
A My understanding in December of 1976, when I was 2' involved with making decisions in these areas, was that whether 3
it was commercial or not had no impact on any tax treatment.
j 4
Whatever tax treatment was available to the company with 5
commercial was available to it based on the portion of the test 6l program that had been completed well before December.
I 7
specifically reviewed a document that was prepared by tax 8
people in the accounting department, I believe, in which they f
9 asked whether we had taken TMI Unit 2 through the degree of 10 testing that a reference case had completed that was the basis i
11 for a tax ruling.
12 My recollection is that we had completed perhaps even prior,i i
13 to the steam valve problem, but certainly in September, testing i
14 of the program equivalent to that that was the basis for the i
15 tax ruling.
l 16 Q
Do you remember being shown the tax ruling itself, the i
17 reference case that you referred to or the ruling that grew i
I 18 out of it?
19 A
I don't remember if I was shown that, but I believe
~
20 I was.
If it is a one-or two-paragraph kind of summary of 21 it, at least I believe I read that much.
22 Q
You said you were shown a document.
Was that the 23 docu. ment you were referring to or were you referring to a 24 company memorandum that outlined the criteria necessary to w.o.r.: n.oo,wn, w 25 meet this ruling?
t t
rtl 2' 910 I!
I A
My recollection is that there was a company memorandum 2
developed which gave the company staff opinion on this matter 3
based upon that reference.
I 4'
I believe that I was asked by the controller --
S Q
Who would that be?
6l A
Ed Holcomb, what the condition of TMI 2's test 7
program was vis-a-vis the reference case, and I believe that 4
8 at the time he talked with me -- it was on the telephone and 9
he read me a couple of paragraphs that desicrbed the basis 4
10 for the tax ruling -- I gave my opinion where TMI 2 was i.
II vis-a-vis that reference case, and I believe I subsequently 12 l saw a memorandum which, in effect, said that that was not an I3 issue for us with regard to being commercial by the end of the Id year, which had within it or attached to it the couple of 15 paragraphs that at least summarized that referer.ce case.
16 Q
When you say that set forth reasons why this was notj t
17 an issue, w as that a memorandum that set forth the argument l
18 that the unit had already met these requirements sometime I9 earlier in the year?
20 A
Would you ask me that question again?
I am not 21 sure I followed it.
- 17 22 Q
My question was whether the memorandum er document 23 that you saw set forth an argument or a position as to why the 24 unit had already met earlier in the year whatever requirements AcsJede el Reoorters, Inc.
25 were necessary under the tax laws.
i o
y
1 9_
4.
,3
-A e
I t
I{
A My recollection is tha: the memorandum jus se:
1 2
forth the' factual information relative to the reference case 3'
and what we had on TMI 2 and drew the conclusion that the 4
company was in position to treat the unit from a tax standpoint 5
in a similar manner whether or not it was commercial.
6 O
Whether or not it was declared commercial before 6
7 the end of calendar '76?
i i
8 A
night.
t i
9 Q
Dt you recall what the crucial element of the tax 10 ruling was; was it the operating license or was it II synchronization with the grid or a certain power level?
i 12 A
I am not even sure the unit was synchronized with 13 the grid in the reference case.
I think mv imoression was i
Id that the IRS would consider the unit appropriate for taking l
l 15 a tax credit on the basis that it had the operating license 16 and had loaded fuel, and it was, therefore, from their stand-I 17 point, a complete installation.
The demonstration of the I8 functionalness of the investment was not part of their concern.,
i I9 MR. FRAMPTON:
Off the record.
20 (Off the record.)
2I MR. FRAMPTON:
On the record.
22 For the record, Matt, if there exists such a 23 document dated in or around November-December of 1978 24 describing the company's position with respect to tax treatment A.J.omi n conm, i. :.
l 25 of Unit 2, we would like to have that made available to us for l
i l
l e
I
- 1 23 112 I
inspection.
2 TEI WITNESS:
I would like to volunteer something here if I may, because I think it bears on certainly the atmosphere 3
within which I was functioning.
4 5
BY MR. FRAMPTON:
6 O
Please do.
7 A
That was the expression in late December, when 8
completion of the test program before the end of the year was 9
problematic, on the part of Diechamp and Kun: to me that we 10 would complete the test program as we said we would, and if Il that was January 2 instead of the 31s of December, why, so 12 be it.
The commitment had been ma-e and they effectively 13 wanted me to understand that I was not under any pressure to 14 declare the test program complete or to take the approach of 15 declaring it commercial at some partial load, and, in f act, we 16 purposely backed off the schedule over the Christmas weekend i
17 from a home office standpoint and the direction I gave to 18 the people here at the site was to not provide extra manning 19 to expedite the test program, but to the extent that normal shift manning and people that would normally be available 20 21 over that holiday weekend were available to proceed with the 22 test program, fine, but that, unlike many previous holiday 23 weekends, for several years, we weren't going to put the pressurt 24 on the personnel here, the staff, to go full speed ahead over Am-Fooeret Reporters, Inc.
25 tha weekend.
c l
t l
rtl 24 113 I
I
}
It was principally -- I guess it grew out of concern on my 2
part as to whether it would even be prudent to put that type of F
3l pressure on them.
It might be counter productive in terms of d
the attitude and morale of the people who would be doing the S
test program.
6!
I felt we would gain more in the relatively short future 7
to try to let people have that weekend and come back in after 8
the holiday weekend and pick it up.
The interest and kind of 9i sense of pride, I think, on the part of the people here, the i
10 plant staff, was such that we did do substantial testing over II that weekend.
12 '
It was a very productive weekend.
I think the tone was 13 set from the top of the corporation that we would be deliberate Id in what we did.
15 Q
I certainly wasn't going to miss the cuestion that f
16 would have elicited that answer, but since you brought it up, I7 why don't we explore that a little bit?
l 18 You say that you, yourself, gave instructions not to push I9 over the Christmas weekend.
If we wanted to corroborate that, 20 who would we talk to?
Are there any documents that would 21 reflect that that you could point us to?
22 A
Well, there was nothing put out by me in writing 23 to that effect.
I think that --
2
Q If you were us, how would you look to show that Am Facerel Recorters. Inc.
25 from other sources besides your testimony?
l
l 4
1 A
Jack Herbein and John Barton or Dick Heward.
I guess 2
one could also look at the payroll records for that weekend I
3j and see to what extent there were more people here than were i
4 necessary for normal manning.
If extra people were here, I 5
don't think that would necessarily say that what I said was 6!
incorrect or that I am misleading you on it.
It would reflect, 1
7' I think, assuming those people wanted to come in and work, that 8
they came in on a voluntary basis because of their desire to 9
keep the thing moving.
There may well have been, with the 10 attitude that existed at that time, a fair number of people 11 that did uhat.
But what I wanted to avoid was putting pressure 12 cn people to work over that weekend that weren't scheduled to 13 work and didn't want to work.
14 0
What do you recall about your conversations with 15 Mr. Dieckamp in which he expressed a view that the test 16 program should be completed one way or another whenever it 1
17 was finished?
Did he eventually tell you in so many words i
thathedidn'twantitrushedorthatitwouldn'tbecurtailed?{
18 19 A
I think --
20 Q
What was it that gave rise to his having to say this?
.21 A
I think I reviewed probably two or three times 22 during the month of December with nunz and Dieckamp, one or 23 both of them, how the test program was progressing, and I am surt 24 I gave Diecksmp updates on it a couple times a week, at least, Ame.oerei neoorwn, inc.
25 through that month.
There was discussion during the middle of i
r:1 26 l
115 l
I !
Decemb'er, were we goingte make it er weren't we going to make i
l e p it by the end of the month.
Not really so much with regarf e
I 3
to the end of the month as, you know, what additional oppor-tunities for slippage was there?
Because we were down near 4
~
5; the end and we were again trying to forecast that particular l
6l time when we would co=plete the test program, because there 7
were a lot of people who we were talking to about the plant 8
schedule at that time.
9 A lot of people were tryingto keep abreast of what was 10 going en who were external to the company.
I don't remember II exactly which meeting it was, but I certainly remember, prior
~
12 to Christmas, the guidance frem Dieckamp and I am confident, 13 based on his discussion, that it was based upon conversation 14 with Kunz, that they recognized the possibility that we would 15 not complete the test program prior to the end ef
- ne T.anth 1
16 and if that was the case, then we would not declare commercial.
t 17 We had made that commitment to the PCC that we would complete i
18 it and we would abide by that.
19 We would not go back to them with a suggestion that they, 20 in effect, consider agreeing to a different approach than 21 that.
We certainly wanted to be sure that we were deliberate --
22 I won't say hasty -- but that we were deliberate in executing 23 the test program and careful not to do something that was 24 dumb at this point of time.
Ace-Fooeral R porters, Inc.
25 In the sense of doing something dumb, to rush through I
l
f
- 1 27 l
116 i
I{
something that we needed to be more reflective about what we 2" knew and where we were and where we were going.
3 MR. FRAMPTON:
Let's take a couple of minutes.
i 4
(Recess.)
I.
5 MR. FRAMPTON:
Back on the record.
6 BY MR. FRAMPTON:
7 O
I think you said before that you did have some meetings late in 1977 about construction and sdheduling issues.#
8 9
Do you recall late 1977 test in which the reactor coolant pumps 10 were damaged?
The seals were damaged or identified as a Il problem?
12 A
No, I don't.
I knew that we rebuilt the seals, we 13 i modified the seals.
I don't recall at this tirae that we had Id any tests where those seals were, in fact, dr.maged.
15 Q
We were talking about whether there were any incentiv,es I
16 in your mind other than the test nyar, incentives to get the j
i i
17 unit on line before the end of 1978.
Were there any discussions, i
18 that you had with Mr. Dieckamp or Mr. Kun: as to whether --
19 let me strike that and start by asking you another question.
20 Were you aware late in 1978 there was going to be a hearing 21 or argument I think before the Administrative Law Judge of the 22 PUC in early or mid-January on the rate ca.;e?
Some kind of 23 proceeding at that time in January of 1979-?
l 24 g,
7 fully expect I would have been aware of that.
I Ace.Feoerst Reporters, Inc.
25 had taken part quite extensively in those hearings.
i
rtl 28 117 I
I O
I think you said a little while ago that even if 2
the plant hadn't been declared commercial before the end of 3
1978, you still would have argued that it could have been 4
included in the rate base.
The company would have taken that 5
position?
~
6 A
If I said that, that is overstepping really what I 7
could conclude.
I don't know what the company's position 8
would have been, had that not been in operation.
I am only 9
saying, having it in operation removed it as an item that 10 had to be addressed.
- 18 Q
The questien I want to ask is whether you had any 12 discussions with anyone to the effect that even if you didn't get the plant into commercial operation at the end of 1978, i
I3 Id nonetheless, if you got it into commercial operation in early I
O 1979, before this hearing -- before the PUC or its examiner, 16 that would still be very desirable because you would be able to I
17 l
repeat at the hearing.
i I
I8 Well, the plant has gone into commercial operation.
Do you recall any discussions along those lines?
20 A
I don't specifically.
I think the January proceedings a
21 were an expression of oral argunments on the case.
I am sure 1
22 L was aware of that meeting but I don't remember any discussion.
23 with anyonc as to what the impact of saying it was in service at that time even though it wasn't by December 31 -- I don't 24 Am Fooeral Recorwes, Inc.
25 recall that conversation.
i l
rtl 29 118 I
C Do you recall whether there was any penalty or i any concern about a penalty for failing to meet the date on 3
which you had made a prior commitment to the pool that Unit 2 would go into commercial operation?
.- ~
S A
My recollection -- my understanding of the obligation 6
of the pool was that June 1, 1979, was the important date 7
to us in terms of commitment.
A1 though I expect that we may i
8 have, at one time, have committed to have the unit in service 9
in June of 1978 to the interchange, I expect once we identified l 10 that we were likely to miss that date, that it probably was i
II diverted a full year or postponed a full year in terms of a l
12 commitment on planning to the pool.
I3 Q.
That was your understanding as of late 1978?
That Id June 1, 1979, was the important date there?
I 15 A
I believe so.
16 Q
Do you recall any concern about satisfying the I7 120-day guideline that is contained in some FERC regulations l
18 for the test period?
j 19 A
Yes.
20 Are you familiar with that rule 9-D?
Q 21 A.
Yes.
i 22 O
What do you recall about that rule and the concern l
l 23 to meet that time limit or be concerned about the time limit l
i 24 in some way?
Aes Fooeral Reco,ters, Inc.
25 A
My recollection is that that was primarily an
\\
f l
l r:1 30 l
119 1
1ladministrativeconcern.
i 2
The 120-day criteria, so to speak, had been established 3l by the Federal Power Commission, the predecessor to the Federal ;
i 4
Energy Resources Commission, at a time which, to my understand-l 5
ing, it was directed more at fossil plantand fossil plant 6
exnerience.
7 I was nc.
aware of any comysny ever having any difficulty 8
with getting FERC's ag; cement ;o an extension of that 120-day 9
period for nuclear units.
I am not even aware of any difficulty 10 they had getting an extension for fossil units when justifica-11 tion was shown for why the 120-day period shouldn't be brought 12 to bear.
i 13 So I didn' t consider it a problem other than being sure 14 to keep FERC apprised of the extension of our start-up program 15 and providing the proper documentation for them to make a 16 determination that the 120-day criteria could be waived.
I 17 Q
In some of the documents that we have seen, there is 18 a reference to something called a unit acceptance test.
Are l
19 you familiar with that term?
~
20 A
Yes.
{
1 21 Q
Can you help us with what it means?
22 A
The terminology comes out of the contrr.c with
{
I 23 Babcock and Wilcox.
The contract, as I recall -- it speaks 24 for itself -- identified that within 30 or 90 days -- I forget l l
AmOWFeIRuorwn.im.
25 exactly what it was -- but within some specified time period i
l
rtl 31,
l 120 I
after B&W idenfied to the company that the unit was ready 2
to conduct its unit acceptance test, the company would conduct 3
the test or, for payment purposes under the contract, would be f
considered to have been conducted if we failed to meet that 5
window.
The test was a four-hour test that basically only i
~
i 6
demonstrated that the unit provided its warranted output of 7
steam, or energy in the form of steam.
It was not a total i
8 overall measurement of performance of all the systems.
It was t.
9 important from a contractual standpoint.
I i
10 0
Was that test, in fact, performed for Unit 27 II l
A Yes.
i O
Do you remember when?
l 12 l
I 13 A
My recollection is it was the last weekend of Id February.
I know that I was not interested in formally per-15 forming that test prior to the end of the period in which I i
i 16 was permitted under the contract to perform it.
It was a l
l 17 formality in our case because the warranted cut =ut related to i
18 about 87 percent power and clearly we had the energy output l
t 19 equivalent to 87 percent power.
So there was no incentive 20 from my standpoint to perform that test before the end of the 21 period that the contract Arovided for performance after l
t i
22 notification, so that if we uncovered anything in the way of e
i l
23 performance anomolies, in the meantime, I had that much more 24 leverage to talk with B&W about corrections.
i A = 4 m u s meno m n.ix.
25 So I directed specifically that that test be scheduled for i
I e
rtl 32 l
121 I
I the last weekend before that time period ran out and my 2
recollection is that that was the last weekend in February.
3 0
Were you ever told or were complaints ever made to 4
you by anyone that the test schedule was being rushed or that 5
there was not enough time allowed in the test schedule to perform 6
the tests that you had set forth in your own criteria to 7
conduct before going commercial?
8 A
No.
I don't recall anyone making an observation to 9
me that the schedule was insufficie.nt for conducting the test 10 program.
11 I think it was recognized by all of us that the test program-12 schedule was an optimistic one.
It was certainly recognized 13 that there was relatively minimal provision in the schedule I#
for anomolies developing or problems developing in the test i
15 schedule but that is, I think, understood at the time the test 16 schedules are put together.
I7 It represents a relatively optimistic sequence of completion!
18 of the test program.
I think my answer to that would have been I9 that may be of interest to the people from perhaps reliability 20 of our forecast when we go commercial but didn't impact at all 21 on the conducting of the test program because we were going to 22 conduct the test program that was required, whether it extended
'3 from February to the end of December, or whether it went from 4
24 February to uly.
The test program requirements were spelled 4. %.e.i menorwes inc.
25 out and those were to be completed.
So the pressure of schedules I
- 1 33 122 i
If was not something that we would take shortcuts in order to l
make schedules, so to speak.
3 I don't think there was that attitude expressed on the part I
cf the management of the project, management of Met Ed and
- a certainly not on my part that I am aware of.
6!
Q Do you think there was a strong feeling in the 4
7 organization that it was desirable and, indeed, there were 8
specific incentives to finish the testing and go commercial before the end of the calendar year, eithermonetaryincentives{
9 10 to the company or otherwise?
11 A
I am not aware of anybody within the company keying 12 financial incentive to the end of the year.
I guess I may have 13 discussed in my staff meetings the posture of being commercial l
1 8
14 vis-a-vis the rate case and not being commercial.
t 15 I can't recall specifically, but I might very easily 16 have talked about that, because I usually reviewed with my l
I7 staff the rate case proceedings, the i=portance of them.
1 18 The major financial incentive I think that people were 19 aware of was the continuation of AFDC and the pressure that 20 put on us from meeting the budget levels for the project as 21 the schedule stretched out.
I am sure throughout the project, 22 throughout Met Ed, staff here there was an awareness that 23 AFDC was running on the order of three and a half million 2#
dollars a month.
Ami ewatRuorw,s,Is
'5 So. that problably represented a larger pressure, as it t
l l
I l
L^
J
i rtl 34 123 1
were, on the organization in the sense of their awareness of 2 I it than the rate case issues.
3 See, the other thing is that until the first half of 4
December, we were extremely confident that the unit would not i
5 even be up against the end of the year for going commercial.
6, I think it weild be a fairly gross misunderstanding to think l
7 ll in the September-October time frame people were worried about the l
S end of the year.
Worrying about the end of October and end of 9
November, that it was kind of a week or two weeks at a time t
10 the thing was moving out in front of us.
11 It really wasn't until December, itself, I think, that the 12 issue started to come up in our own discussions as to 13 whether or not we would make the end of that month.
14 Q
For the record, could you identify what AFDC is 15 and describe what that pressure was?
Was that simply internal t
I 16 budgetary concern or did that have other financial impiciations?
l 17 A
AFDC is an abbreviation for allowance for funds l
1 18 used during construction.
It is the debit placed against the i
19 project for the interest cost on the investment in the project
~
20 at a given point in time.
21 As we put together our project cost estimates, they must 22 be tied to a project schedule.
When we get within a calendar 23 year and find the schedule stretching out significantly, the l
monthly AFDC. charges are the major component of additional cost 24
[
Ace Federal Recorters, Inc.
25 within that calendar year, which goes over and above the budget.
l l
t l
L-
)
rtl 35 l
I 124 I lSothatasweregularlyandroutinelytrackourbudget i
2 ! expenditures, when we see the schedule -- when we see expendi-3 tures against budget, which I did at monthly review meetings with my staff, as the schedule slips out, we see not only the 4
5 additional direct work and indirect work factors of cost, but i
l
^
6; on a two-or three-to-one ratio, we see the -- maybe that is i
i I
7; not quite fair -- one-to-one or two-to-one ratio. we see i
8 the cost going up as a result of the AFDC.
- 19 9
O Am I correct in thinking that AFDC is allowable as 10 a capital cost that should be put in your rate base when you 11 go commercial?
How is that handled?
12 A
Yes.
It is a recognized part of the investment 13 cost.
The AFDC rate being debited against the project cost, 14 is approved by the PUC -- in Pennsylvania, at least -- and I i
i 15 think in New Jersey, as well.
In fact, I am sure it is in i
16 both States.
l 17 Assuming that we are consistent with their approved AFDC f
f 18 rates, yes, we are able to have it recocnized in rate base in i
19 a general sense.
20 That is taken issue with by people who have intervened 21 in the rate case with regard to whet 6er all of it shculd be in or i l
22 whatever.
23 Q
Or whether you should be penalized for delay caused 24 by-the company.
Is that the basic argument?
Ace.Feoeros Reporters, Inc.
25 A
Yes.
Conceptually, AFDC is a recognized cost of I
rtl 36 125 I
the project Oc be reflected in the rate.
FERC recognizes it as 2
part of the investment, as part of what is allowed to be 3
depreciared and recovered.
Q So you are saying the pressure to reach a cc:-off 5
point on AFDC was a constant pressure but it wasn't calendar 4
year specific.
You would like to be able to change or transfer 7
that cost as soon as possible, whether it was October, November,.
i 8
December, or January?
9 A
From a project standpoint, that is correct.
- Now, 10 from probably the controller's standpoint, his major incentive is to get itrecognizedinhates.
To the extent there is a II 12 gap between whether it goes intoservice and whether it goes l
I3 into rate base, it adversely affects earnings, as I would I#
understand it.
I 15 But from a project standpoint, frcm my viewpoint as the i
director of the project, my incentive -- and I think my 16 I7 organization's sense of pressure -- was to get it into servic?
16 and try to stay as close to our forecast cost estimate as we i
19 could.
20 Q
Referring again to Exhibit 14, there is a reference on page 4 to plans to blitz a certain amount of remaining items I 21 I
22 during the screen-outage.
Can you explain what that means?
Do i i
23 j
you know whether the screen outage actually occurred in the 24 case of Unit 2's test program?
Ace Federst Reporters, Inc.
25 A
Let me explain first what screen outage is.
It is i
{
I
rtl 37 126 1
Ih the way we identify an outage taken after the plant has operated at power for a while, during which we remove from main steam 2
3!
line valves fine-mesh screens, the installation of which is for 4
the purpose of preventing any debris or corrosion that results 5
from the construction period from entering the turbine.
6!
My recollection is that that is about a 7-or 8-day i
7' procedure.
We normally would like to do it after full power 8
operation and before the unit has operated something on the orde'r 9
of 90 days at full power.
We also had guidance from Westinghouse 10 that indicated that some period of operation at less than full 11 power would be sufficient from their experience to remove the t
12 screens.
13 Ic 4't remember now when we did remove them. We didn't 14 do it immediately before starting up for commercial operation, 15 I don't believe, because we were only down about a day and a i
16 half at that time, as I recall, from the full load trip to the ;
i 17 resta '
l 18 That would not have been enough time to remove it.
I just 19 can't remember whether we did it during an earlier outage in 20 December or we decided to defer it until a convenient time t
21 after being commercial.
My very vague recollection is we took i
l 22 them out in December, before we got to full power.
23 Now, with regard to the blit:ing of the work -- I guess 24 that war, the' other half of your question -- what that Ace. Federal Re00fleft, Inc.
25 identified. is that we had a lot of what we called punch list
rtl 38 127 I
- items, various and sundry miscellaneous items to clean up, 2
and that there were plans on the part of Met Ed, which the 3
board endorsed, to put as much manpower to work during that period of offline time to correct as many of those as possible. :
i 5
I think the connotation I would put on that is that the company i 6
was quite willing to spend the money in that time period to 7
take care of as many of those items as we could and clear them i
i 1
8 off the books.
t i
9 We weren't putting a budgetary limit, as it were, on that 10 outage work to defer some of those items until a later time 11 I
for financial reasons.
12 Q
Do you recall that there was an amendment to the I3 operating license that permitted you to postpone certain i
Id hydrostatic tests o i
i I *t A
Tha doesn't ring a bell with me.
Do you have a t
16 system identified that might help my memory?
I7 MR. FRAMPTON:
Off the record.
i i
18 (Off the record.)
BY MR. FRAMPTONt 20 Q
Looking at materials relating to amendment No. 1 i
\\
21 to the operating license, it appears that in February, Met Ed i
22 requested a waiver of tech spec requirements removing restric-23 tions on hydrostatic testing at temperatures above 180 degrees 24 Fahrenheit, and pressures up to 2285 psig prior to initial Am. Federal Recorners, Inc.
25 criticality and safety evaluations by NRC states that in the
rtl 39 128 I
I l'
interest of minimizing delays, the licensee proposes that i
2 ! a waiver be granted to permit performance of hydrostatic tests 3I for temperatures no lower than 180 degrees Fahrenheit and 4
pressures no higher than 2285 psig prior to initial criticality.
Do you recall what delays would have been occasioned by 5
6, f ailure to get that change in the tech specs or modification 7
in the tech specs?
8 A
To be sure I understood, I would want to have an 9
opportunity to look at technical specification 3.4.9.1 and 10 figure 3.4-4.
11 I don' t find that attached to the amendment.
I am not sure; i
12 I understand this from just the information provided here.
i 13 0
You don't, then, recall this particular issue of 4
14 your own recollection?
j i
is A
I remember discussion on it and I remember that l
16 we were going to seek a waiver from the NRC.
We obviously t
i 17 reached a resolution, j
I 18 I don't remember the details of it at that time.
19 Q
Okay.
20 A
Perhaps let me postulate a little bit, because I i
i am a little uneasy that we may leave the wrong impression on 21 I
22 this.
I think that the delay invalved is just the delay 23 associated with heat-up to a higher temperature before 24 pressurizing' the 2285 and assuring ourselves that we have got Am FWest Rgemm, lac.
25 stable -- or let me say uniform temperatures in the thick l
l O
fl 129 rtl 40 i
1i walled vessels.
it d
2y The worst case situation, I guess, would be that we would l
3 !
have had to offload the fuel to perform the test, but I don't i
4 think that that is what we are looking at, because I believe I
l 5
we had to de an operational test of tne reactor vessel flange 6l, seal every time we replaced that, so I think it relates to i
7 the temperature at which we could do it.
8 I would want to look at that curve that identifies 9
temperature pressure restrictions to extrapolate further on i
10 it.
I 11 1 Q
okay.
One final cuestion en this area.
Can you i
12 tell me why it was necessary for you to sign for Mr. Herbein 13 and Mr. Miller on supplement A of Exhibit 14 which indicated a
14 at the end of December that the subcommittee of the CORS was 15 satisfied te declare the plant in commercial' operation?
16 A
Yes.
I didn't want to propose sign-off on this 17 supplemental we had, in fact, completed the test program and i
18 that was accomplished on the 28th or 29th of December, and I 19 felt this document should be signed off prior to declaring 1
20 the unit commercial, so my recollection is I telecopied to 21 Herbein and to Gary Miller copies of supplement A so that they 22 could read it as opposed to just hearing it orally, and obtained 23 their concurrence that it was an appropriate document to sign i
24 I off before signing for them.
Since I was in Parsippany or I
Ace Focefel Recorwrs, Inc.
25 Mountain Lakes, Herbein was in Reading and Miller was at the i
9
rtl 41 g
.i 130 I
site, it was not felt necesary on my part to send a messenger 2
on a round trip to get the signatures from them personally.
,I' MR. FRAMPTON:
Off the record.
4 (Off the record.)
5 MR. FRAMPTON:
Back on uhe record.
6!
For the record, we have been discussing, during the 7
break, the questions that I asked about amendment 1 to the 8:
operating license and we have agreed that, since we don't have l
9 the relevant documentation here, when you have a chance to look 10 at that you may want to pro-ide us with some further written l
I Il explanation er submission relating to the facts of that.
12 THE WITNESS:
Yes, sir.
I3 MR. FRAMPTON:
Thank you very'much.
I Id BY MR. FRAMPTON:
l 15 Q
Let me ask you a couple more questions.
The 16 questions relate to commercial operation.
Do you feel, in j
17 light of your position as basically the top corporate official j t
18 reponsible for the test program, that you wielded more influence 6
I 19 on the commercial operation review board than the others on l
20 the board?
i i
21 A
I think that is a difficult thing to judge.
My I
l l
22 experience would indicate that probably one's personality 23 traits and general competence and degree of forcefulness is 24 more a detersinant of the influence one has on that type of AceJocerol Reconen, Inc.
25 group of what are close to peers -- or peers in this case --
i i
rtl 42 131 I
than one
's position in the organization.
i 2f There are probably those that would assert that my combina-l 3i tion of characteristics are such that I might have more than 4
'he average influence on the group.
I would certainly --
I especially in my role as chairman of the committee -- I 5
6 attempted to assure that everybody had the opportunity to give l i
7 voice to their viewpoints and attempted to solicit where 8
observations weren' t volunteered, what the viewpoint of various l 9
members of the board were on items on which they obviously 4
10 had the capability to make a contribution.
11 I don't think it was a kind of steamroller job.
I don't 12 think I am probably the best one to cbserve that.
i 13 Q
With respect to the understanding that you had that i 14 there were no tax advantages to be reaped by getting the unit j
t 15 into service at the end of the year because it had already met 16 whatever tax criteria were applicable, did you communicate i
17 that understanding to other people in your organization or j
i 18 did you ever discuss it with them?
i 19 A
I frankly don't know, but I also don't know that 20 I ever discussed with them any tax considerations.
You know, t
21 it was not something that I recall was a matter of conversation, i
22 with my technical staff or Jack Herbein or ones like that.
It I
23 may well have been, but it was, I expect, at least in a very l
24 offhanded manner if it was talked about at all.
It is not a l
Ace-Federet Reporters, Inc.
25 consideration we normally get involved with.
l
)
l
rtl 43 132 I
i i
Before you leave this area, if you are about to, let me d
2 I volunteer one other comment, I think.
I really think it is commercial or not commercial.
3 l germane to carrying the unit There is nothing I would have recommended to the company we do 4
5 differently than we did after December 30, whether it was I
i.
6l commercial or not commercial, i
7 To the people here at the Island, and to my staff and myself, a
8 being commercial changed nothing for us.
Had it been decided 9
for whatever reason not to declare it commercial, we would 10 have done nothing different in the way of review of the plant performance or scheduling of its operation or anything else.
l Il i
l The plant would have been started up as it was on the 29th 12 or 30 and put on line and operated until some problem developed 13 i
14 and we fixed it and put it back.
l l
15 From our standpoint, we were approaching it and supporting 16 it and feeding and caring for it, as it were, as a commercial I
17 unit.
18 Q
I think you said before that it was difficult for you now to identify throughout the summer and fall of 1978 t
19 I
what the target dates were for commercial operation as time moved
~
20 i
21 along and that date continued to slip.
Are there any records 22 that would show that that we could look for if we wanted to I
23 identify at any given time when the target date was as of 24 that time?
AceCoperal Rooorters, Inc.
25 A
There certainly are.
e rtl 44 1
133 I
IJ Q
What kind cf records?
What are those records?
J is 2"ll A
Che-e is a number of different projec: records i
i
-l 4l that would identify that information.
Various information that i
l we submitted to the PUC, FERC, there is a document I had the d
e staff develop that attempted to analyze the delays that occurred
\\
6!
and how much different actions we had to take would have been 7
expected to delay the in-service date of and by themselves if i
8 they weren't under the umbrella of some other problem.
9, O
Was there an af ter-the-f act analysis?
10 A
Yes.
II Q
When was that prepared?
12 A
I think the first portion of it was prepared in 13 September and October, and then in March we did the last two t
Id or two and a half months of 1978.
And I think that it was I
given to me for 'inal review of the draft the day of or the day l 15 i
16 before the accident, and I think I signed off on it just a i
I7 j
couple of months ago when I finally got caught back up with
)
l 18 looking at some of those items.
I9
- 20 Q
After the April 23, 1978, trip, when you had a l
20 problem with the main steam safety valves, relief valves,
t 21 do you recall imposing any time schedule on the Lonergan 22 Company to test those valves?
l 23 A
The approach we took on that problem was, first of-24 all, to work closely with Lonergan in an attempt to resolve Am-Federal Reporters, Inc.
25 the problem, and in parallel with that, we started fairly shortly I
rtl 445 ;
f.
134 1l after the incident to do the engineering and procurement 2 I activities necessary to change the valves out.
We started 1
I
~
that long before we l
Q Gave up on Lonergan?
-- were convinced the Lonergan valves weren't going l 5
A i
~
6 to be modified to be serviceable.
i 7
Q Let me interrupt you and ask you, Do you recall
{
8 when you located the Dresser valves at Vepco?
j i
Was that soon after the testing -- let me ask it this way.
10 i
Was that long before you gave up on the Lonergan valves 11 i
and decided to switch?
12 A
Yes, it was long before that.
i 13 You talk about testing.
There were a number of phases of 14 the testing.
There was in-plant testing.
There was testing 15 at Lonergan.
Then, when the facility became available in 16 Alabama, or Louisiana, whichever, there was testing down there.!
I 17 Q
There was at Huntsville, Alabama?
l I
18 A
Yes, I believe so.
Wiley Laboratory, I believe.
19 So we had identified, I think, the existence of the Dresser 20 valves probably within 10 days after the incident.
Effectively; we stayed with Lonergan until we were at the point where we l
22 had to make a decision whether or not to make the change-out 23 if we were to avoid additional delay in the event we had to 24 go that direction eventually.
A m 4 W waf R go m n, W.
i e
i' i
25 Up until the time that the continued testing of the Lonergan
- 1 46 135 I
valves would not extend our schedule, we stayed with them.
2f I think very
- 1y -- day for day -- within a matter of i
3f a very few days, i. not =ero days, when not proceeding with the 4
change-out would lengthen that course of action --
~
5, O
It was a critical path approach?
6!
A Right.
7 Q
You started your engineering for the contingency 8
and when you got ready to go for the Dresser valves, that was 9
the time cut-off for Lonergan, is that it approximately?
10 A
Yes.
We went further thtn that.
We ordered I
11 materials and we ordered valves, recognizing that maybe we wonld 12 fix the problem with the Lonergan ones and have to salvage i
13 that material.
14 So I don't think, in the sense that we gave Lonergan a l
15 deadline to either have serviceable valves or demonstrate i
a 16 serviceability by this date or we turn our back on you as the I
i 17 approach we took, in that sense I didn't give him a deadline, 18 but from a project excuse standpoint, the deadline was i
19 additional delay of everything to take the alternative route.
20 0
Going back to the subject we were discussing this 1
21 morning, you related a conversation that you had on Friday 22 morning, March 30, with Joe Hendry concerning the possibility 23 of an evacuation advisory.
Did you have any conversations on 24 that subject"on that morning with anyone from the state of Aa.Feoerei Rooorters, Inc.
25 Pennsylvanir or any state agencies?
6
rtl 47 136 1
A I didn't.
I want to clarify.
I cannot remember if 2 f Chairman Hendry told me at that time that he had made the 3
recommendation or they were planning on making the recommenda-4 tion.
I am fu::y on that.
5 Q
I understand that neither -- that none of the tech 6
spec mandated review committee's -- the PORC, the GRC or the 7
CORB report to you -- those are all committees that report to 8
people within the operating company hierarchy, is that correct?
9 A
That's correct.
10 Q
What is your relationship with those committees?
11 I mean, you as vice president of GPU Service Company but also 12 your organization.
Does your organization review the minutes 13 of any of those committees or regularly participate in the work 14 of any of those committees?
Members of my committee -- members of my staff',
15 A
Yes.
i 16 are members of the committee.
For example, the chairman of the 17 Three Mile Island GORS -- General Office Review Board -- which {
18 is not a mandated -- I guess maybe I will have to retreat on the 19 basis of that -- since GORB is not mandated, the answer is 20 none of the mandated ones do.
21 But we do have and have continued to maintain the function-22 ing of the general office review board.
23 The chairman of that is a member of my staff.
One of the i
24 regular members is a member cf my staff.
One of the consult-AceJederal Reconen, Inc.
25 ing members, I guess under his contract he was consulting to
oi 137 rtl 48 jl 1NHermanDieckamp,but in practice he worked directly with me a h
i 2
great share of the time -- so that I had, through them, a ict 3
of visability to general safety issues.
ii't There was, in fact, a third me=ber of my staff that was a 4l'
~
5l-regular member.
That was Don Reppert, who was the audi:
6.
sdocommittee chairman on the GOR 3.
So I had a lot of awareness 7'
of plant problems and plant concerns from that as well as from Bl routine discussions with Herbein as to where his problem areas l
9 were and also from the activities of the Nuclear Management i
10 Review Cpmmittee.
11 -
! am not sure just where you people go with this thought I
i 12 1 but it does seem to me that this is an example of where the 13 company clearly does more than the minimum recuirement, so 14 to speak, and involves its management in a meaningful way 15 above and beyond what are written in the technical specifica-16 tions.
i 17 0
You are speaking specifically of the fact that even 18 though the GORS is not mandated by the tech specs for Unit 2, 19 that you kept it and applied it to Unit 2 as another layer of 20 management review?
As well as Nuclear Management Review Committee.
21 A
22 0
And the Nuclear Management Review Committee, is 23-that a committee that holds approximately annual management 24 review sess$ons at each unit?
Am Focerol Repo,wes, Inc.
25 A
Yes.
And in order to have those as productive as I
i l
I l
l.
T I.'l 138 rtl 49 t
I possible, they were aisc kept abreast of all correspondence 4
3 t
between the company and the NRC.
i 1
We received from Met Ed summaries and identification of I
d those correspondence, and copies of ones that were felt 5
particularly significant for safety issues.
6, O
Mr. Arnold, you were quoted in yesterday's New f
7 York Times -- whether accurately or not -- as having told the 6
reporter in substance that you felt that we now had a good i
9 basis or some good basis for evsluating why the accident l
10 happened, what it means to us concerning the likelihood of U
other accidents and what changes are required.
j i
12 I would like to ask you to share your thoughts with us on I3 each of these three subjects.
I4 First, your thoughts about why the accident happened.
15 A
I think there are two primary components, I guess, 16 to the "why."
One is that in the course of doing small break 17 lock analysis, there either was not done -- or certainly was 18 not sufficient focus placed upon the results if it was done --.
I 4
I9 an analysis of a small break in the steam space of the 20 pressurizer.
j i
21 I am not aware of the results of any analysis of that 22 particular accident for B&W units.
In a more general sense,
{
23 I think there has been a preoccupation with performing safety l )
analysis on worst-case scenarios that led to a general 24
- I A..s e w e m o m n.ix.
1 25 uncoupling between the operators and those safety analyses as l
l i
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r rtl 50 I
133 s
1 as to their value in helping many to understand the plant.
i
>2 ll They represented a sequence that was so unlikely in his mind, 3 ll and I think properly judged to be unlikely, that the behavior 4
of the plant for those postulated circumstances were not what j
5j he would expect to see in the event he had a LOCA or one ::.3 6
of the other kinds of accidents that occurred.
i 7
I think this is probably particulcrly true of the LOCA.
I I.
8 think, between those two situations or those two historical I
I 9
facts, we developed a weak spot in the built off -- in the j
i 10 preparation of the operator through the procedures we provide II him and the training we give him to recognize and respond to the 12 circumstances with which our cperators were faced with on the t
13 morning of March 28.
l i
14 I guess I could expand on that and enlarge on it but if i
15 I were to try to get at what I considered the nub of the 16 problem, I think it lies in those areas.
17 Q
Second, let me ask you in your view what the 18 implications are concerning the likelihood of other accidents, '.
19 and maybe I should ask you particularly to address the question 20 of how we ought to go about identifying what other kinds of
}'
l
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21 weak spots there may be.
end RTL 22 23 24 i
A.Jeew moorn,s. im.
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- think one of the very enccuraging things that ecmes
'3
$!2 L cut-cf the acti.-it.- since the accident is the extent to which, i,
il3 ] frcr where : sit, at least, the industry and the regulaters 0
4!l have been willing to say the accident is a basis for a very 5l.generalreviewoftheindustry,thewaywedothings, i
and the 4
6!
approach we take.
While I have some problems that the Lessons 7
Learned Task Force only came out with lessons learned relative I
B to the utility's performance and nothing relative to the NRC's 9
way of doing things, I think, nevertheless there clearly has
{
t 10 been on the part of the Commission Staff -- and I think there I
11 ' has also been on the part of the industry -- an attempt to be 12 very objective in looking at the full scope of important safety 13 issues in the industry.
I 14 I think a lot of very good things have come out of that.
15 I think, for example, when one looks at the Lessons Learned 1
4 16 Task Force, there is very little, if anything, that you can j
i 17 identify in tr.at that is related to causes of the accident, 18 in a sense.
I 19 Let me say that one looks at our accident and says how did 20 it happen or what happened in the control room at that time?
4 1
i 21 Very little of the lessons learned really are directed at that.
I 4
22 specifically.
They are directed, I think, at the two aspects 3
23 of our prior approach that I mentioned before, and they are 24 addressed at'a whole range of related issues, issues that we 4
5.ac.i n.conm. inc.
i 25 have relooked at or looked at with fresh insight as a result t
l t
I 141 jef 2 1
of our review of the accident and the industry has done tha:
2 and the NRC has done that.
3 4
You are saying, in essence, the accident galvanized 4
people to look for other soft spots, among other things?
~
5 A
I think so.
While a lot of things have been 6
identified, when accomplished, they will lead to more reliable 7
operation from a safety standpoint and greater capability to 8
recogni=e the extent of damage if an accident happens and to l
l 1
control that.'
l 9
t 10 We haven't seen come out of that review an oversight that 11 I would consider to be comparable to the oversight of the i.
12 steam break LOCA.
A lot of very, very competent investigation, I
13 I think, has been done into the technical basis for the plant 14 designs and the plant operating procedures.
That's not to say 15 that we may not still find some of those kinds of problems.
16 PerhapswewillfindthattheWestinghouseletterissued10 days l l
orsoagorelativetoqualificationofnon-safetyequipmentforj 17 18 the environment in the event of a steam break in certain l
i 19 locations may be an equivalent situation, I don't know, but l
20 we haven't -- with all of the new attitude that has been l
i 21 developed, we haven't identified a' lot of other soft spots.
l i
1 22 We identified places where the differences can be improved, where 1
23 they can be increased in depth, you can do more of what we have; 24 been doing better, accelerate some of the things that many of Am FWWW Reorwn,1N.
25 us already had under way.
For example, we had under way within ;
f f
a
142 jtf 3 1
our ogranization, within our company, an organizational approach 2 i that we have taken since the accident or put into place since 1
3 l. the accident, so.there has been the acceleration of some of l
4 these kinds of things.
I think the fact that we had an acciden*
4 now will cause the whole industry to take a much more skeptical
~
5
~.
6; view of arguments about why something is okay for the short i
7 time or why something probably isn't as big a problem as people -
8 might think it is.
9 It has given us a better perspective in which to view i
10 future safety problems.
11 C
And in your view, what are some of the major changes i
12 cr changes that you think are required or that one would hope i
13 for or look for?
14 A
I guess I would focus on two areas.
The first one 15 is the display of information and the availability of info:sation ;
i 16 about the plant to the operators.
I think that is clearly an i
I.
17 area that we can and need to improve.
I i
k 18 TherestoftheitemsthatIthinkarefirstorderimportance!
i 19 can generally be gathered, I believe, in training of the 20 operators, related to training of the operators, the additional.
i 21 analysis, the approach to utilyzing analysis for trair.ing, the i 22 education of our operators in heat transfer, thermal dynamics, i
I 23 plant perfommance for various accident scenarios, the provision' 24 of readily accessible in the sense of readily available Am Fewa1 Roorwes, im 25 appropriate procedures and then accessing the appropriate I
l i
r 9
143 I
jtf 4 1 j procedures for the operaters, the training of the operaters 3
- 2. in the conduct of operations on the shift in the broadest Il.
3i context.
L i
4 So I think those are what come out from an introspection
~.
5 standpoint, or let's look at ourselves.
I think what also l
6' comes out as an item as far as what we need to do is, some way l
7 or other, we have get to be able to assist the public in having 8
an understanding of the risk associated with nuclear power and 9
an understanding that in the context of the risk that exists I
10 relative to the non-utili::ation of nuclear energy.
I think
{
11 that is probably the tougher one, i
12 0
Mr. Arnold, thank you very much for your time and 13 your cooperation.
We appreciate it very much.
e.t.
- 21 (Whereupon, at 4:50 p.m.,
the hearing was concluded.)
14 l
15 i
4 i
16 i
i i
17 e
I 18 19 20 21 22 23 24 Ace Fooeral Reporters, Inc.
25 es
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